ProtonMail Account Freed After PayPal ‘Freeze’

The secure email project ProtonMail now has access to the funds it has raised, several days after they were frozen by online payments company PayPal.

The Switzerland-based project, which aims to provide encrypted end-to-end email in light of growing privacy concerns, had raised a little over $300,000 (£175,000) in a two week period, as part of a crowdfunding campaign.

PayPal Freeze

ProtonMail said on Monday 30 June that PayPal had frozen its campaign funds. “This morning, we received an email and telephone call from PayPal notifying us that our account has been restricted pending further review,” wrote ProtonMail CEO Andy Yen in a blog positing. “At this time, it is not possible for ProtonMail to receive or send funds through PayPal. No attempt was made by PayPal to contact us before freezing our account, and no notice was given.”

“Like many others, we have all heard the PayPal horror stories, but didn’t actually think it would happen to us on our campaign since PayPal promised, very recently, to improve their policies,” wrote Yen. “Unfortunately, it seems those were hollow promises as ProtonMail is now the latest in a long string of  crowdfunding campaigns to be hit with account freezes,” he wrote, before providing hyperlinks to other examples.

ProtonMail was furious when it pressed a PayPal representative on the phone for further details about the account freeze. Apparently, the PayPal representative questioned whether ProtonMail was legal and if it had government approval to encrypt emails. ProtonMail instead urged people to donate via credit card or Bitcoin, instead of PayPal.

But the PayPal freeze was short lived, and late on Tuesday, the account freeze was lifted.

Restrictions Lifted

“PayPal has let us know that the restrictions on our account have now been lifted and we have been able to extract our funds,” said Yen. “Thank you for your support on this matter, it no doubt played a large part in getting PayPal to do the right thing in record time.”

The development will have added to the negative news surrounding PayPal of late.

In May a PayPal strategy executive, Rakesh “Rocky” Agrawal, resigned and posted a number of Twitter posts criticising other members of the company. The posts were subsequently deleted. Other executives have also recently left the firm.

Earlier in the year, PayPal president David Marcus ironically admitted that his credit card was cloned whilst on a trip to the UK. He tweeted that a ‘ton’ of fraudulent transactions had been carried out via his account following the hack.

PayPal has also endured several attacks on its operations recently, coming under attack in February from notorious hacker group the Syrian Electronic Army. The SEA carried out an attack on the DNS infrastructure which served the site, redirecting users logging into the service to a page full of messages criticising the US government.

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